Capital One Builds A Foundation for Growth Through Key Systems Integrations

The senior VP and CIO of Capital One Bank's Financial Services Division has helped consolidate and simplify the bank's IT infrastructure through a number of acquisitions.

As the divisional CIO of Capital One's auto finance division, and later its financial services division, Chandra Dhandapani has helped lead a number of integrations and initiatives that have facilitated growth in Capital One's retail loan operations over the past several years.

Since Dhandapani joined in 1998, Capital One has grown its retail lending operations rapidly through a number of acquisitions, and Dhandapani has seen her responsibilities and role expand in stride with that growth. "Before we knew it, we were transforming from $300 million in annual lending originations to $6 billion and then $13 billion," she recalls.

Those acquisitions have brought on a number of challenges for Dhandapani to address as she built an IT infrastructure for the bank that could handle the business's increasing needs while being able to scale for future growth.

When Dhandapani took over the role in the auto finance division in 2009, the division's IT systems were experiencing stability challenges with a higher-than-acceptable volume of high severity incidents, she says. "I didn't realize [when I took on the role] we were having a high-severity systems-availability incident every day. Systems would break during the day, and then there would be people on my team who would be working all night to make sure that the systems would be up and running the next day," she explains.

Dhandapani and her team started by putting measures in place to track the bank's internal data behind those systems failures and come up with a plan.

Aim High

After gathering and analyzing the necessary data, Dhandapani challenged her team with a lofty goal. "When I first told the team that we were going to aim to reduce incidents by 90%, everybody almost fell out of their chair," she adds with a laugh.

To do so, Dhandapani and her team found that they had to replace some of their systems' components and make significant architectural changes in the underwriting and fulfillment system. "Our bread-and-butter underwriting system had design flaws in its architecture, and we needed to address this with urgency," Dhandapani says, declining to name the vendor of the solution. By replacing system components and bringing in additional technical talent for support, the group managed to reach Dhandapani's goal of a 90% reduction in systems outages.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

re: Capital One Builds A Foundation for Growth Through Key Systems Integrations

Capital One usually gets attention for its analytics/data prowess, but Dhandapani's accomplishment underscore the importance of infrastructure in supporting any kind of data management-related initiative -- not to mention the core transactions (lending, payments, etc.) of banking. Given how critical the use of data/analytics are to competitive positioning and regulatory compliance, the ability to execute on these massive infrastructure and core systems initiatives (relatively) quickly and efficiently is absolutely critical. This is an oversimplification, but in some ways it's a kind of throwback to what CIOs/tech executives used to do, but with the very modern twists of collaboration, business unit alignment, customer experience, etc.

re: Capital One Builds A Foundation for Growth Through Key Systems Integrations

As you and I know from covering the insurance business as well, there's little any company can do in terms of enabling the best customer experience/regulatory compliance/innovation without modern infrastructure. Companies who identified the digitalization of the financial business and the potential explosion in data and its stewardship have a major advantage.

re: Capital One Builds A Foundation for Growth Through Key Systems Integrations

Yes it was pretty clear talking to Chandra how important it was to get these big infrastructure projects done quickly to allow both the IT team and the business to get up and running on other projects that could improve the customer experience and sales. The urgency combined with attention to detail to pull off suck a big key project quickly is impressive.

re: Capital One Builds A Foundation for Growth Through Key Systems Integrations

After many years where banks and other large companies neglected infrastructure -- or worse yet, built it in the wrong way -- it seems that institutions are really focusing on cleaning up and standardizing their infrastructure. There is a tremendous amount of waste and excess capacity that can easily be rationalized.

re: Capital One Builds A Foundation for Growth Through Key Systems Integrations

There definitely seems to be growing awareness of the efficiencies that can be gained through improving the IT infrastructure in banking. I think we're starting to see in core systems, with more and bigger banks willing to switch to modern core systems. There are still a lot of banks though, especially bigger ones, that are hesitant to clean up legacy systems. I think that is one of the impressive things about the work Chandra and Capital One have done here.

re: Capital One Builds A Foundation for Growth Through Key Systems Integrations

A good deal if the hesitancy, I imagine, comes from the complexity and massive cost associated with a core system replacement project. For a large bank, overcoming the budget and resource challenge must be difficult. I'm sure every bank is different, but it would be interesting to know what was the straw that tends to "break the camel's back" when it comes to deciding to embark on a core systems replacement project?

Can anyone who has done a core replacement (or is going through one now) share some insights?